First Part-Out Of Used ERJ-145s Could Be Coming

Aerovision International has acquired 10 EmbraerERJ-145 aircraft that have been in storage for two years, raising the possibility that some of them could be retired even though the oldest of the 50-seat regional jets was built in February 2000.

Nine of the aircraft were built between March 2001 and March 2002, the Aviation Week Intelligence Network fleets database shows.

Aerovision acquires aircraft for disassembly, resale or lease. Jeff Barnes, president and co-owner of the Muskegon, Mich.-based company, says it has not decided what it will do with the 10 ERJ-145s, which are being stored in Hot Springs, Ark. “We’re still reviewing our options, from lease to resell to part-out,” he tells Aviation Week.

If Aerovision decides to part out even one of the aircraft, it would mark the first retirement of a non-prototype ERJ-145. That also could be a reflection of the state of the market for 50-seaters, especially with U.S. carriers ridding themselves of large numbers of smaller regional jets.

But officials with Embraer’s EEC Leasing subsidiary insist it would not be indicative of a trend.

“To be 17 years into a program and to have the first parted out [now] I think is a very positive message on the product’s asset value,” says Mark Dunnachie, ECC Leasing’s managing director. Dunnachie also is skeptical of predictions of how quickly 50-seaters will be dropped from the U.S. market, given the number of feeder routes dependent on them, and says good markets are developing for the aircraft in Africa, Russia and South America, and perhaps even in the Middle East and among oil, gas and mining businesses.

The 10 acquired by Aerovision were operated by Mesa Air Group, which shed more than 30 of the model as part of its 2010 bankruptcy court-supervised Chapter 11 restructuring.

Even with the Aerovision acquisition, 23 for the former Mesa ERJ-145s remain parked; all of them were built between April 2000 and November 2003.

Brent Martin, who works in sales and acquisition for Stuart, Fla.-based Jet Sales of Stuart, says he has seen “decent” ERJ-145s selling for a little more than $3 million, which gets close to the point where parting them out makes more sense.

But Pete Seidlitz, president of Washington-based aircraft reseller Bristol Associates, says the price generally is higher than that, and adds that Embraer recently stepped up its support for developing new markets for the aircraft.

Bristol, which still is involved in finding buyers for ERJ-145s once operated for Continental Airlines by ExpressJet, sold two last year to a South African airline that Seidlitz would not identify. He describes Africa, Latin America and parts of Asia as promising markets for the aircraft.

“There is a real band of pricing on the ERJ,” says Seidlitz, who describes the range in price as $3-7 million. A lot of that is based on age, he adds, with 1996 and 1997 models the toughest to move. The 1998 and 1999 aircraft are somewhat easier to place, he says, and selling those built in 2000-05 “get[s] a lot easier.”

Even with the newer aircraft, there are challenges. For example, most ERJ-145s delivered to U.S. airlines are not equipped for air stairs, which airports in some developing markets require. Also, Europe has different certification requirements than the U.S., so there is a cost to moving the aircraft to new markets.

Within the past year, Seidlitz says, Embraer “has gotten much more proactive in providing support and creating some liquidity in the market.” That includes a recent introductory meeting that Embraer hosted for operators in South Africa, and very active efforts in Russia.

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